Finance (No. 2) Bill

Debate between James Murray and Anthony Browne

Committee of the whole House
Wednesday 19th April 2023 Commons Chamber

[Anthony Browne]

The hon. Gentleman is making the case for a special NHS-only or doctors-only regime. Does he accept that senior workers in other parts of the public sector are affected by the lifetime pensions allowance? There was already a separate scheme for judges, and we know about the former Director of Public Prosecutions having his own individual scheme, but does the hon. Gentleman accept that there are senior police officers, senior local authority civil servants, senior Government scientists, air traffic controllers—as we have heard—and other workers across the public sector who are disincentivised from continuing to work by the current regime?

[James Murray]

I thank the hon. Gentleman for his intervention, but the argument we were hearing from hon. Members on both sides of the House was about NHS doctors and keeping them in work. The Chancellor himself, when he was Chair of the Select Committee, said that we needed targeted intervention to help NHS doctors. No one was talking about a wider scheme to affect everyone with the largest pension pots until the Chancellor stood up and made his announcement on Budget day. I respectfully suggest the hon. Gentleman focuses on our amendments in hand and on new clause 5, which suggests that, rather than proceed with a blanket scheme affecting everyone with a pension pot, we should do what I thought there was an emerging consensus around and develop a targeted scheme for NHS doctors.

Otherwise, the Government’s approach fails the critical test for any Government spending—whether they are spending public money wisely. Yet Ministers refuse to entertain the prospect of a targeted scheme for NHS doctors instead. That is why we have tabled new clause 5, which would require the Chancellor to make recommendations on what a scheme targeted at NHS doctors would look like. We believe that is a crucial question to be answered. I hope that any Conservative Members, including the hon. Gentleman, who are concerned about spending public money wisely, getting value for money and supporting our NHS, will vote for new clause 5 in the Division Lobby later.

[Anthony Browne]

Will the hon. Gentleman give way?

[James Murray]

No; I am going to make some progress. The hon. Gentleman has intervened quite a lot and I am looking forward to his speech, as I am sure everyone in the Committee is.

When the Economic Secretary responds, I would be grateful if he could address the points set out by new clause 4, in particular by giving some much-needed clarity on the scale of the impact the Government expect their changes to pension allowances to have. Can he tell us how many people are expected to stay in work or return to work as a result of these policies? What sectors do they work in? How many of them are NHS doctors? Those are important questions, yet it has been hard to get exact answers from Ministers. The Office of Budget Responsibility has said the changes to pension contribution allowances will increase employment by around 15,000, but Paul Johnson of the Institute for Fiscal Studies has said that figure is “optimistic”.

When the Financial Secretary to the Treasury was asked on Second Reading of this Bill how many doctors would stay in the NHS because of these measures, she confidently quoted Department of Health and Social Care statistics that around 22,000 senior NHS clinicians would have been expected to exceed the £40,000 annual allowance this year. However, she may not have known that, at the very same time, the permanent secretary who oversees Government spending was appearing before the Treasury Committee, where the hon. Member for South Cambridgeshire (Anthony Browne) was asking her questions. When asked about the evidence on how many of those 22,000 NHS clinicians would have been discouraged from working by the cap, she said the evidence was “mixed” and that they would need to do further evaluation.

It seems clear that the Government simply do not know how many people will be brought back into work as a result of their changes to pension tax-free allowances. They certainly do not know how many NHS doctors will come back into work, and they have clearly failed to do the thinking on how a bespoke approach for NHS doctors could operate.

That is why we oppose the Conservatives’ pension changes and why we will be voting for a fair fix for doctors’ pensions to get them back into work. We will be voting to spend public money wisely. We will be voting against a Government who choose to cut tax for the richest 1%, while pushing up stealth taxes and council tax on working people across the country.

Finance (No. 2) Bill

Debate between James Murray and Anthony Browne

2nd reading
Wednesday 29th March 2023 Commons Chamber

[James Murray (Ealing North) (Lab/Co-op)]

I beg to move,

That this House declines to give the Finance (No. 2) Bill a second reading because, notwithstanding the introduction of the multinational top-up tax and electricity generator levy, it fails to introduce a targeted scheme to address pension issues affecting NHS doctors, instead making blanket changes to tax-free pensions allowances which, as they will cost around £1 billion a year and benefit only those with the biggest pension pots, should not be the priority, and because it derives from a Budget which failed to set out an ambitious plan for growing the economy.

Six months ago the previous Chancellor, the right hon. Member for Spelthorne (Kwasi Kwarteng), described our economy as being stuck in a “vicious cycle of stagnation”, and on that one point he was absolutely right. To his credit, unlike many of his colleagues, he at least took responsibility, on behalf of the Conservative party, for more than a decade of economic failure.

However, although the previous Chancellor was right to point to our country’s economic stagnation, the prescription that he and the previous Prime Minister offered was nothing short of disastrous. They set the UK economy on fire, and people are still paying the price as a Tory mortgage penalty does lasting damage to the living standards of working people; yet the current Prime Minister and Chancellor expect praise for being better than the arsonists who preceded them. Could the bar seriously be any lower? British families and businesses deserve so much better than that. After 13 years of economic failure, people and businesses across the UK deserve a plan for the economy that offers more than managed decline.

[Anthony Browne (South Cambridgeshire) (Con)]

I fear that the hon. Gentleman may know what I am about to say. Is he aware that, according to the International Monetary Fund, economic growth in the UK—GDP, either per capita or in terms of constant prices—has grown faster than economic growth in France, Germany, Italy and Japan, faster than the G7 average, faster than the EU average and faster than the euro area average? That is quite a record, and one to be proud of, so it is not a case of 13 years of economic failure. I invite the hon. Gentleman to pay tribute to the Government’s success in ensuring that our economy grows faster than the economies of all those other countries that have faced similar international challenges.

[James Murray]

Just two weeks ago, we were promised a Budget for growth. Let us now look at the data that was published alongside that Budget. It shows that ours is the only G7 economy that is forecast to shrink this year. Our long-term growth forecasts were downgraded in the Office for Budget Responsibility report.

[Anthony Browne]

Will the hon. Gentleman give way?

[James Murray]

No, I am going to finish what I am saying before I give way again.

That data confirms that we are suffering the worst falls in household incomes in a century. The hon. Gentleman need look no further than the OBR report alongside the Budget, which make it very clear that this Government have little or nothing to be proud of when it comes to our economy. Across the UK, people and businesses want to get on with making our country better off, but we are being held back by a Government who are out of energy and out of ideas. That much is clear from the Bill that is before us today, which seeks to implement some of what the Government have promised.

Of course, consideration of any Bill on Second Reading must include what it omits as much as what it contains. Let us start with the fact that this Bill contains no mention of introducing stealth tax rises for working people, although we know that that is exactly what the Government are doing. We know that in the Budget of March 2021 and in the Finance Act that followed it, the then Chancellor, now the Prime Minister, froze the basic rate limit and personal allowance for income tax for four years. In the recent autumn statement of 2022 and in the Finance Act that followed that, the current Chancellor extended those freezes by a further two years. Now, following this month’s Budget, the OBR has made it clear that the Government’s six-year freeze in the personal allowance will take its real value in 2027-28 back down to its level in 2013-14. What is more, in a double whammy, families across the country will be hit next month by the Tories’ council tax bombshell, a move that will take the bill for a typical band D property above £2,000 for the first time. Look beyond the rhetoric from the Conservatives, and the reality is clear: their stealth taxes are hitting working people hard.

However, while the tax burden for working people is up, important measures that we have been calling for to make the tax system fairer are nowhere to be found in the Bill.

There is nothing in it to close the loopholes in the windfall tax on oil and gas giants, which we have been urging the Government to do for so long. Of course, we have been pressing for an extension of the energy price freeze for many months, and we were glad that the Government followed our lead in the Budget, but it is wrong that they are still leaving billions of pounds of windfall profits for oil and gas giants on the table when those windfalls of war should be helping to support families through the cost of living crisis.

Non-domicile Tax Status

Debate between James Murray and Anthony Browne

Tuesday 31st January 2023 Commons Chamber

[James Murray]

We are debating the importance of a fair tax system for the future of this country. This Government have sat on non-dom tax status for months and years. We are questioning why this Prime Minister is not heeding Labour’s calls to abolish the non-dom tax status once and for all, and spend the money on the NHS, childcare and a growing economy.

When the Government are making working people pay more tax, it is simply wrong to allow wealthy people with overseas incomes to continue to benefit from an outdated tax break. It is also bad for UK business. The loophole prevents non-doms from being able to invest their foreign income in the UK, as bringing it here means that it becomes liable for UK tax. That is why the shadow Chancellor, my right hon. Friend the Member for Leeds West (Rachel Reeves), first set out our party’s position last April—four Conservative Chancellors ago. She confirmed that, in government, Labour would abolish the non-dom status as part of our reforms to create a fairer tax system for working people. We will abolish that indefensible 200-year-old tax loophole and introduce a modern scheme for people who are genuinely living in the UK for short periods.

Labour believes that, if a person makes Britain their home, they should pay their taxes here. That patriotic point should be accepted on all sides of the political divide, yet Ministers in this Government, under this Prime Minister, seem desperate to defend the non-dom loophole. What is it about the current Prime Minister that makes him so reluctant to abolish non-dom tax status? The Government are increasing taxes on working people, businesses are struggling, and our NHS is in crisis. Yet the Conservatives defend a small number of rich people who use non-dom tax status and offshore trusts to wriggle out of paying taxes here in Britain.

We know that the Prime Minister understands how non-dom tax status works—he can hardly claim ignorance on that—so how can he possibly justify it? How do Conservative MPs look their constituents in the eye and tell them that their taxes will keep going up, while the taxes of non-doms must always stay down? It is indefensible, and that is why the next Labour Government will act by abolishing the non-dom tax status.

[Anthony Browne (South Cambridgeshire) (Con)]

The hon. Member asks what makes this current Prime Minister reluctant to change non-dom tax status, but what made Tony Blair and Gordon Brown, the former Labour Prime Ministers, also very reluctant to scrap the non-dom tax status? They both reviewed it and both kept it.

[James Murray]

We were not increasing taxes on working people when we were in government. The hon. Gentleman can start looking at the record 13 years ago, but it is high time that Members on the Government Benches took responsibility for what they have done in government—for the low growth, for the high taxes on working people and for the fact that our public services are crumbling.

[James Murray]

As my hon. Friend reminds us, increasing taxes on working people has long been a hallmark of the Conservatives. That has led us to a situation where we have the highest tax burden on working people in more than 70 years.

[Anthony Browne]

Will the hon. Gentleman give way?

[James Murray]

No, I will make some progress. Our position contrasts with that of the current Government, whose Ministers have been at pains over the past year to protect this unfair loophole. When the Chancellor told the Treasury Committee last November that he wants

“to make sure that wealthy foreigners pay as much tax in this country as possible”,

his words could not have rung more hollow. They rang almost as hollow as the Prime Minister’s promise when he took office that he would run a Government of “integrity, professionalism and accountability.” The truth is that the Prime Minister is running a Government without even basic competence and it is hitting people across this country.

Finance (No. 2) Bill

Debate between James Murray and Anthony Browne

Report stage
Wednesday 2nd February 2022 Commons Chamber

[James Murray (Ealing North) (Lab/Co-op)]

Any member of the public hearing that the Government were today voting their Finance Bill through the House of Commons might expect such a Bill to do something to help with the cost of living crisis facing families up and down this country. Our new clause 6 makes this simple point. It asks the Government to set out how the measures in the Bill will affect household finances, the amount of tax working people are paying, and the rate of growth in the economy in the coming year.

I suspect that Ministers will want to avoid our new clause 6 because they know what the answers will be. The truth is that whether through this Bill or any other means, the Government are letting energy bills soar, refusing to cancel their national insurance hike, and failing to set out a plan for growth. The Conservatives’ failure to grow the economy over the last decade, and their inability to plan for growth in the future, has left them with no choice but to raise taxes. This low-growth, high-tax approach to the economy has become the hallmark of these Conservatives in power.

Let me make it clear why our new clause 6 might make such difficult reading for Conservative Members. People see their energy bills going up and about to soar, inflation at its highest rate in decades, and their wages falling in real terms—and what do the Tories do? They raise national insurance by £274 for a typical full-time worker. It is the worst possible tax rise at the worst possible time. We warned that it was wrong when the Government pushed it through Parliament last year. Our arguments have only got stronger since then, so instead of digging in, the Chancellor and the Prime Minister should do the right thing and scrap this tax hike on working people and their jobs. Despite calls on the Government from all sides, they are so far refusing to budge. In this Bill, they offer no relief to working people, who face soaring prices and tax bills. They have managed to find time, however, to put into law a tax cut for banks, as we see in clause 6.

Clause 6, which our amendment 35 seeks to delete, would see the rate of the banking corporation tax surcharge fall from 8% to 3%, with the allowance for the charge raised from £25 million to £100 million. That will cost the public finances £1 billion a year by the end of this Parliament. Throughout the passage of the Bill, the Financial Secretary to the Treasury has used smoke and mirrors desperately to pretend that the Government are not cutting taxes for banks. She has tried to hide this tax cut under a separate change to corporation tax that may never even come to pass.

[Anthony Browne (South Cambridgeshire) (Con)]

Including corporation tax and the surcharge, the taxation of banks is currently at 27%. After this legislation, it will be 28%. Does the hon. Member agree that 28% is higher than 27%, and therefore taxes on banks are actually going to rise, not go down?

[James Murray]

It is the same tired doublespeak by Government Members trying to hide this tax cut for banks. However they try to present it, in this Bill the banking surcharge is cut from 8% to 3%; it is there in the policy costings from the Treasury that the measure will cost the public purse £1 billion a year by the end of this Parliament. If Government Members do not like this tax cut, they can simply vote with us to delete it at the end of Report, rather than pretend it does not exist.

[Anthony Browne]

Will the hon. Member give way?

[James Murray]

No, I am going to make some progress.

The truth is that this tax cut is going ahead at a time when bankers’ earnings are on the rise, with investment banks’ profits soaring off the back of a wave of takeovers and mergers caused by the pandemic. The UK arm of Goldman Sachs—a business that the Chancellor will know well—boosted its pay by more than a third last year, Barclays is set to raise bonus payments by more than 25% in its corporate investment bank, and boutique banks in the City are expected to do especially well, as they are exempt from rules that limit bonuses.

These measures show just how out of touch this Government and this Chancellor are: they are championing a tax cut for banks while ignoring calls from the TUC, the Federation of Small Businesses, the Institute of Directors, Labour MPs, some on their own side, and the British public, to abandon their tax cut on working people and their jobs. If Ministers are still refusing to listen, today we are giving their Back Benchers an opportunity to say, “Enough is enough.” They can vote with us tonight to cancel the banking tax cut and make the Government think again.

The national insurance hike is wrong because it threatens people’s financial security. I will now turn to other aspects of the Bill that relate to wider economic security and the threat of economic crime.